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"Architect/Engineering Contract" means an agreement for architectural, engineering, or other professional design, consulting, or construction management services for a public work/construction project.
"Back Contracting" shall mean any agreement or other arrangement between a prime Contractor and its Subcontractor that requires the prime Contractor to perform or to secure the performance of the subcontract in such a fashion and/or under such terms and conditions that the prime contractor enjoys the financial benefits of the subcontract. Such agreements or other arrangements include, but are not limited to, situations in which either a prime Contractor or Subcontractor agrees that any term, condition, or obligation imposed upon the Subcontractor by the subcontract shall be performed by or be the responsibility of the prime Contractor.
"Bid" means a quotation, proposal, solicitation, or offer by a Bidder or Contractor to perform or provide labor, materials, equipment, supplies, or services to the City for a price.
"Bidder" means any business that submits a Bid or proposal.
"City" means the City and County of San Francisco.
"City-wide LBE Participation Goal" means the overall, aspirational City-wide LBE participation goal set by the Mayor each fiscal year as a percentage of the overall dollar value of Contracts anticipated to be awarded in the upcoming fiscal year subject to this Chapter.
"CMD" means Contract Monitoring Division.
"Commercially Useful Function" shall mean that the business is directly responsible for providing the materials, equipment, supplies or services to the City as required by the solicitation or request for quotes, Bids or proposals. Businesses that engage in the business of providing brokerage, referral or temporary employment services shall not be deemed to perform a "Commercially Useful Function" unless the brokerage, referral or temporary employment services are those required and sought by the City. When the City requires and seeks specialty products made to order for the City or otherwise seeks products which, by industry practice, are not regularly stocked in warehouse inventory but instead are purchased directly from the manufacturer, no more than five percent of the cost of the product shall be credited towards LBE subcontracting participation requirements. When the City requires and seeks products which are, by industry practice, stocked in warehouse inventory and are, in fact, regularly stocked by the listed supplier or distributor, no more than sixty percent of the cost of the product shall be credited towards subcontracting participation requirements. If the listed supplier or distributor does not regularly stock the required product, no more than five percent of the cost of the product shall be credited towards LBE subcontracting participation requirements.
"Commodities Contract" means an agreement to purchase any product, including materials, equipment, and supplies, including associated incidental services.
"Contract" means any agreement between the City and a person to provide or procure labor, materials, equipment, supplies, or services to, for, or on behalf of the City for a price to be paid out of monies deposited in the City Treasury or out of trust monies under the control of or collected by the City. "Trust monies" include, without limitation, all monies to which the City is entitled to receive or deposit in the City Treasury. A "Contract" includes an agreement between a non-profit or public entity and a Contractor for the performance of construction or construction-related services, where the Contract is funded by the City. A "Contract" includes any agreement between the City and a person to provide or procure labor, materials, equipment, supplies, or services to, for, or on behalf of the City for PUC Regional Projects. A "Contract" does not include: (1) grants, whether funded by the City or by Federal or State grant funds, to a nonprofit entity to provide services to the community; (2) sales of the City's personal or real property; (3) loan transactions, whether the City is a debtor or creditor; (4) lease, franchise, or concession agreements; (5) agreements to use City real property; (6) gifts of materials, equipment, supplies or services to the City; (7) agreements with a public agency except for contracts or other agreements between the City and persons or entities, public or private, in which such persons or entities receive money from or through the City for the purpose of contracting with businesses to perform public improvements; or (8) agreements awarded under the emergency provisions of Administrative Code Sections 6.60 or 21.15 where there is either (a) no time to apply Discounts or establish subcontracting participation requirements, or (b) no immediately available LBEs are certified for the needed emergency work.
"Contract Awarding Authority" means any City officer, department, commission, employee, or board authorized to enter into Contracts on behalf of the City. A non-profit or public entity that receives funds from the City to pay for construction or construction related services is a "Contract Awarding Authority" for the purposes of contracting for the performance of those services.
"Contract Monitoring Division (CMD)" means the Contract Monitoring Division of the Office of the City Administrator to which the City Administrator has delegated responsibility to implement this Chapter, and shall also mean and include any department or division of the Office of the City Administrator that the City Administrator may in the future designate as successor to the Contract Monitoring Division to assume the duties of the Contract Monitoring Division set forth in this Chapter.
"Contractor" means any person who enters into a Contract with the City.
"Control" means a person possesses the legal authority to manage business assets, good will, and the day-to-day operations of a business and actively and continuously exercises such authority.
"Design-Build Contracts" means Public Works/Construction Contracts authorized under Administrative Code Section 6.61.
"Director" means the Director of the Contract Monitoring Division, or his or her designee.
"Discount" means a downward adjustment in price or upward adjustment in rating of a proposal, whichever applies, that is made under Section 14B.7.
"Eligible Public Works/Construction Contract" means a Contract with (1) an estimated cost which exceeds $10,000 but is less than or equal to the Threshold Amount, and (2) a scope of work which, based on CMD Micro-LBE availability data, would attract bids from at least two qualified Micro-LBEs. Eligible Public Works/Construction Contracts include Job Order Contracts set aside for Micro-LBEs under Administrative Code Section 6.62(C).
"Eligible Services/Commodities Contract" means a Professional Services, General Services, Architect/Engineering or Commodities Contract with (1) an estimated cost which exceeds $10,000 but is less than or equal to the Minimum Competitive Amount, and (2) a scope of work which, based on CMD Micro-LBE availability data, would attract bids from at least two qualified Micro-LBEs.
"General Manager" means the General Manager of the San Francisco Public Utilities Commission, or his or her designee.
"General Services Contract" means an agreement for those services that are not professional services. Examples of "general services" include, but are not limited to, janitorial, security guard, pest control, and landscaping services.
"Integrated Project Delivery Contracts" means Public Works/Construction Contracts authorized under Administrative Code Section 6.68.
"Joint Venture" means an association of two or more professional services or architect/engineering businesses acting as a Contractor and performing or providing services on a Professional Services or Architect/Engineering Contract, in which each Joint Venture partner combines property, capital, efforts, skill, and/or knowledge and each Joint Venture partner shares in the Ownership, Control, management responsibilities, risks, and profits of the Joint Venture in proportion to its claimed level of participation. Joint Venture partners may be in different industries provided that each joint venture partner meets the minimum qualifications in the Bid, and each is acting as a prime contractor and otherwise meets the definition of a Joint Venture.
"LBE" means Local Business Enterprise.
"Local Business Enterprise (LBE)" means a business that is certified as an LBE under Section 14B.3.
"MBE" means Minority Business Enterprise.
“Minimum Competitive Amount” means (1) for the procurement of commodities, professional services, and architect/engineering services, the “Minimum Competitive Amount” as defined in Section 6.40(a) of the Administrative Code, and (2) for the procurement of general services, an amount equivalent to the “Threshold Amount” as defined in Section 6.1 of the Administrative Code.
"Minority Business Enterprise (MBE)" means a business that is certified as an MBE under Section 14B.3(E)(1).
"OBE" means Other Business Enterprise.
"Other Business Enterprise (OBE)" means a business that is certified as an OBE under Section 14B.3(E)(3).
"Owns" or "Ownership" means a Person who:
(a) possesses a record ownership interest, such as partnership interest or stock interest, of at least fifty-one percent (51%) of the business or such lesser amount as the CMD determines, under the circumstances of the particular business' overall ownership and control structure, constitutes a significant ability to influence business operations and a strong personal stake in the business's viability;
(b) possesses incidents of ownership, including an interest in profit and loss, equal to at least the record ownership interest;
(c) contributes capital to the business equal to at least the record ownership percentage (unsecured promissory notes or notes secured by the business or business assets are not sufficient to constitute capital contributions); and
(d) actively and continuously devotes expertise to the operations of the business relevant to the business's "Commercially Useful Function" of a quality and quantity proportionate to the record ownership interest.
"Owns" or "Ownership" for purposes of determining whether a business is an MBE means that a minority Person possesses all of the above indicia of ownership, and either individually, or in combination with the interests of other owners who are minority Persons, the ownership by minority Persons constitutes at least fifty-one percent (51%) of the overall business ownership.
"Owns" or "Ownership" for purposes of determining whether a business is a WBE means that a woman possesses all of the above indicia of ownership, and that either individually, or in combination with the interests of other owners who are women, the ownership by women constitutes at least fifty-one percent (51%) of the overall business ownership.
"Person" means any individual or group of individuals, including but not limited to partnerships, associations, and corporations.
"Professional Services Contract" means an agreement for services that require extended analysis, the exercise of discretion and independent judgment, or the application of an advanced, specialized type of knowledge, expertise, or training customarily acquired either by a prolonged course of study or equivalent experience in the field. Examples of professional service providers include, but are not limited to, licensed professionals such as accountants, and non-licensed professionals such as parking lot management, software developers and financial consultants. For the purpose of this Chapter, a Contract for architectural, engineering, or other professional design, consulting or construction management services for a public work project shall be considered an Architect/Engineering Contract and not a Professional Services Contract.
"Public Works/Construction Contract" means a Contract for the erection, construction, renovation, alteration, improvement, demolition, excavation, installation, or repair of any public building, structure, infrastructure, bridge, road, street, park, dam, tunnel, utility, or similar public facility that is performed by or for the City, and the cost of which is to be paid wholly or partially out of moneys deposited in the City Treasury or out of trust monies under the control of or collected by the City. For purposes of this Chapter only, "Public Works/Construction Contract" includes Contracts between a Person, including a non-profit entity or public agency, and a Contractor for construction or construction-related services, where the Contract is funded by the City.
"PUC" or "Public Utilities Commission" means the San Francisco Public Utilities Commission (SFPUC), the City Department that provides water, wastewater, and municipal power services to San Francisco and, under contractual agreement with 29 wholesale water agencies, also supplies water to 1.6 million additional customers within three Bay Area counties.
"PUC Regional Projects" means (1) projects to be performed outside of the jurisdictional boundaries of San Francisco that are identified as regional projects and included in the formally approved Capital Improvement Program of the San Francisco Public Utilities Commission's approximately $4.6 billion project to seismically reinforce and otherwise enhance the Hetch Hetchy water supply system, also known as the Water System Improvement Program ("WSIP"), as it may be amended from time to time; (2) projects to be performed exclusively outside of the jurisdictional boundaries of San Francisco for which some or all of the cost will be shared by members of the Bay Area Water Supply and Conservation Agency ("BAWSCA"); or (3) projects under Contracts with the SFPUC to be performed exclusively 70 miles or more beyond the jurisdictional boundaries of San Francisco. "PUC Regional Projects" shall include, but are not limited to, Repair and Replacement work ("R&R") to be performed in association with a regional Capital Improvement Program or other BAWSCA cost sharing project, or to be performed exclusively 70 miles or more beyond the jurisdictional boundaries of San Francisco.
"Risk Manager" means the Director of Risk Management, a division of the Office of the City Administrator.
"Subcontractor" means any LBE providing goods or services to a Contractor or a lower tier Subcontractor in fulfillment of the Contractor or Subcontractor's LBE utilization obligations arising from a Contract.
“Threshold Amount” means, for public works/construction projects, the “Threshold Amount” as defined in Administrative Code Section 6.1.
"Woman Business Enterprise (WBE)" means a business that is certified as a WBE under Section 14B.3(E)(2).
(Added by Ord. 92-06, File No. 050784, App. 5/11/2006; amended by Ord. 20-10, File No. 091405, App. 2/10/2010; Ord. 97-10, File No. 100333, App. 5/13/2010; Ord. 8-11, File No. 101006, App. 1/7/2011; Ord. 30-13
, File No. 121105, App. 3/5/2013, Eff. 4/4/2013; Ord. 250-14
, File No. 140999, App. 12/17/2014, Eff. 1/16/2015, Oper. 7/1/2015; Ord. 108-15
, File No. 150175, App. 7/2/2015, Eff. 8/1/2015; Ord. 203-21, File No. 210835, App. 11/12/2021, Eff. 12/13/2021, Oper. 7/1/2022)
(A) Criteria for LBE Certification. The Director shall certify as an LBE any business that meets all of the following criteria and also meets the criteria set forth in Section 14B.3(B):
(1) The business is financially and operationally independent from, and operates at arm’s length to, any other business.
(2) The business is continuously in operation.
(3) The business is a for-profit enterprise.
(4) The business performs a Commercially Useful Function.
(5) The business maintains its principal place of business in a fixed office within the geographic boundaries of the City that provides all of the services for which LBE certification is sought, other than work required to be performed at a job site; provided, however, that suppliers are not required to maintain their principal place of business in San Francisco, but are required to maintain a fixed office in San Francisco that meets all of the requirements of this Section other than the principal place of business requirement.
An office is a fixed and established place of business, as determined by the Director, including a qualified home office, where business is conducted on a regular basis of the type for which certification is sought. A residence qualifies as an office only if the residence is situated within the geographic boundaries of the City, and none of the business owners also maintain an office outside the residence in the same or related field, and a business owner claimed the home office as a business deduction on the prior year’s income tax return, or for businesses started after the last tax return, would qualify for a deduction on the next tax return. None of the following constitutes an office: a post office box, a temporary location, a movable property, or a location that was established to oversee a project such as a construction project office.
To establish a principal place of business in San Francisco, a business must demonstrate that the majority of its principals are based in the San Francisco office.
Suppliers must maintain a warehouse in the City that is continuously stocked with inventory consistent with their certification. Truckers must park their registered vehicles and trailers within the City.
(6) The business possesses a current San Francisco Business Tax Registration Certificate.
(7) The business has been located and doing business in San Francisco for at least six months preceding the application for certification.
(8) At least one business owner has valid licenses or other relevant trade or professional certifications or, where licensing is not required, the business owners individually and collectively have relevant training and experience that are appropriate for the type of business for which the business seeks certification.
(9) The business is Owned and Controlled as defined herein by individuals who reside in the United States or its territories.
(11) The business is not Owned or Controlled as defined herein in part or in whole by a full time City employee.
(B) Business Size Criteria. The Director shall certify as a “Micro-LBE,” “Small-LBE” or “SBA-LBE,” as applicable, any business that meets the requirements of 14B.3(A) and has average gross annual receipts in the prior five fiscal years that do not exceed the following limits:
Category
|
Micro-LBE
|
Small-LBE
|
SBA-LBE
|
Category
|
Micro-LBE
|
Small-LBE
|
SBA-LBE
|
Public works/Construction | $12,000,000 | $24,000,000 | $40,000,000 |
Specialty Construction | $6,000,000 | $12,000,000 | $20,000,000 |
Goods/materials/equipment and General Services | $6,000,000 | $12,000,000 | $20,000,000 |
Trucking | $2,500,000 | $5,000,000 | $10,000,000 |
Professional Services: | |||
Legal Services | $2,500,000 | $5,000,000 | $8,500,000 |
Accounting | $2,500,000 | $5,000,000 | $8,500,000 |
Architecture/Engineering and Related Services | $2,500,000 | $5,000,000 | $8,500,000 |
Specialized Design Services | $2,500,000 | $5,000,000 | $8,500,000 |
Computer Systems Design and Technical Consulting Services | $2,500,000 | $5,000,000 | $8,500,000 |
Management, Scientific, and Technical Consulting Services | $2,500,000 | $5,000,000 | $8,500,000 |
Scientific Research and Development Services | $2,500,000 | $5,000,000 | $8,500,000 |
Advertising and Related Services | $2,500,000 | $5,000,000 | $8,500,000 |
Other Professional, Scientific, and Technical Services | $2,500,000 | $5,000,000 | $8,500,000 |
For every five-year period starting with January 1, 2020-December 31, 2024, the Controller shall recalculate the size criteria limits above to reflect any proportional increase in the Urban Regional Consumer Price Index from January 1, 2020, rounded to the nearest $10,000. The size criteria limits as recalculated by the Controller shall take effect by operation of law on January 1 of the first year of the next five-year period (thus, for example, on January 1, 2025 following the five-year period ending December 31, 2024). The Director shall determine gross receipts according to recognized accounting methodologies that the Director determines most accurately reflect the actual money that the business received during the relevant period. Any business under common ownership, in whole or in part, with any other business in a related industry meets the requirements of this subparagraph only if the aggregate gross annual receipts of their percentage of ownership added together of all of the businesses under such common ownership do not exceed these limits. All businesses owned by married spouses or domestic partners are considered under common ownership unless the businesses are in unrelated industries and no community property or other jointly owned assets were used to establish or are used to operate either business.
(C) For purposes of ensuring nondiscrimination in City contracting and subcontracting, the Director shall further certify all LBEs as MBEs, WBEs, and OBEs according to the Ownership and Control of the LBE and shall maintain data on the availability and utilization of MBEs, WBEs, and OBEs in City Contracting.
(1) MBE Certification. The Director shall certify as an MBE any business that is certified as an LBE and is Owned and Controlled by a Person or Persons who is a member of one or more of the following ethnic groups:
(a) African Americans, defined as persons whose ancestry is from any of the Black racial groups of Africa or the Caribbean;
(b) Arab Americans, defined as persons whose ancestry is from an Arabic speaking country that is a current or former member of the League of Arab States;
(c) Asian Americans, defined as persons with Chinese, Japanese, Korean, Pacific Islander, Samoan, Filipino, Asian Indian, or Southeast Asian ancestry;
(d) Iranian Americans, defined as persons whose ancestry is from the country of Iran;
(e) Latino Americans, defined as persons with Mexican, Puerto Rican, Cuban, Central American, or South American ancestry. Persons with European Spanish ancestry are not included as Latino Americans; and
(f) Native Americans, defined as any person whose ancestry is from any of the original peoples of North America, and who maintains cultural identification through tribal affiliation or community recognition.
(2) WBE Certification. The Director shall certify as a WBE any business that is certified as an LBE and is Owned and Controlled by one or more women.
(3) OBE Certification. The Director shall certify as an OBE any business that is certified as an LBE and (i) does not demonstrate to the satisfaction of the Director that it is Owned and Controlled by one or more women or one or more minority Persons or (ii) is not certified as an MBE or a WBE.
(Added by Ord. 92-06, File No. 050784, App. 5/11/2006; amended by Ord. 20-10, File No. 091405, App. 2/10/2010; Ord. 8-11, File No. 101006, App. 1/7/2011; Ord. 250-14
, File No. 140999, App. 12/17/2014, Eff. 1/16/2015, Oper. 7/1/2015; Ord. 203-21, File No. 210835, App. 11/12/2021, Eff. 12/13/2021, Oper. 12/13/2021)
CODIFICATION NOTE
(A) Period of Certification. Certification for all categories of LBE shall be effective for a three year period provided that (1) businesses must at all times throughout the certification period meet the criteria in Section 14B.3 as applicable; and (2) the Director may, in the Director’s discretion, certify a business for a shorter period based on the unique attributes of any applicant or renewal applicant that relate to such business’s eligibility or continued eligibility for certification. The Director may require certified businesses annually to submit copies of their federal income tax returns and other documentation for the purpose of verifying continuing eligibility for any certification status hereunder. The Director may suspend or revoke the certification of any LBE that fails to submit requested tax returns or other documentation in a timely fashion or otherwise fails to cooperate with the Director in any investigation of that business’s continued eligibility for certification.
(B) Certification or Re-Certification Denial. Whenever the Director determines that an applicant or a certified business whose certification period is expiring (renewal applicant) is not eligible for any requested certification, the Director shall notify the applicant or renewal applicant in writing of the basis for such decision, and the date on which the business will be eligible to reapply for the same certification; provided, however, that in all cases, the applicant or renewal applicant has the right to notice of the Director's determination and a full and adequate opportunity to be heard before the Director's decision is final. The Director shall require a business to wait at least six months but not more than two years after the denial before reapplying for certification in the same category.
(C) Appeals. Applicants and renewal applicants may appeal a Director's denial or refusal to renew certification, or length of waiting period for reapplication imposed hereunder to the City Administrator, or Hearing Officer appointed by the City Administrator, for a de novo determination of the matter appealed. After affording the applicant a full and adequate opportunity to be heard, the City Administrator's or Hearing Officer's decision shall be the City's final administrative decision on the matter. Unless the City Administrator or Hearing Officer issues an order to the contrary, the Director's determination shall not be stayed during the appeal process.
(A) PUC-LBE Certification. In order to increase the ability of small businesses that are located within the PUC water system service area but outside of the jurisdictional boundaries of San Francisco to compete for PUC Regional Contracts, the Director shall certify businesses as PUC-LBEs, including as either Small-PUC-LBEs or Micro-PUC-LBEs, and as either PUC-MBEs, PUC-WBEs, or PUC-OBEs, that meet all of the following criteria:
(1) Only established small public works/construction, construction material supplies, construction equipment rental, trucking, and professional services firms including architecture or engineering firms may be certified as PUC-LBEs or any subcategory of PUC-LBE. Only firms located within the PUC water system service area may be certified as PUC-LBEs or any subcategory of PUC-LBE.
(2) Only firms with average gross annual receipts in the prior five fiscal years that meet the requirements of Section 14B.3(B) for Small-LBEs or Micro-LBEs, respectively may be certified as PUC-Small-LBEs or PUC-Micro-LBEs.
(3) PUC-LBEs owned and controlled by one or more minority persons or women according to all of the criteria set forth in Section 14B.3(B), shall be certified as PUC-MBEs or PUC-WBEs. PUC-LBEs that do not demonstrate qualifying ownership and control by minority persons or women shall be certified as PUC-OBEs.
(4) Firms shall meet all criteria that the City Administrator shall by rule adopt to the end that firms certified as PUC-LBEs shall be similarly situated to LBEs to the extent practicable, taking into account the special circumstances of their location and the needs of the PUC Regional Projects.
(B) PUC Small Firm Advisory Committee. There is hereby established a PUC Small Firm Advisory Committee as follows:
(1) The PUC Small Firm Advisory Committee shall have five members who shall be appointed by the PUC General Manager to represent the interest of individuals and businesses that are or may be eligible for PUC-LBE certification. Members shall serve at the pleasure of the PUC General Manager. Members of the PUC Small Firm Advisory Committee shall not be compensated, but shall be reimbursed for expenses in accordance with the Controller’s published policies.
(2) The purposes and duties of the PUC Small Firm Advisory Committee are:
(a) To adopt rules and procedures within the Advisory Committee’s responsibilities;
(b) To assist the Director in verifying the eligibility for certification of PUC-LBE applicants by conducting site visits or undertaking other local or regional fact gathering to ensure that applications for PUC-LBE certification undergo substantially the same scrutiny as applications for other LBE certification;
(c) To outreach to the business community about PUC-LBE certification and contracting opportunities and to provide information to the Director regarding the availability of potential PUC-LBEs;
(d) To receive reports from the City, to publicly discuss, and make recommendations for rules and procedures regarding the implementation of this Chapter 14B for PUC regional projects to the Director and the PUC;
(e) To make recommendations to the SFPUC General Manager to study the feasibility of additional programs that will increase the participation of eligible firms for the regional program; and
(f) To provide status reports on the Advisory Committee’s activities to the SFPUC General Manager and the Director.
(3) The PUC Small Firm Advisory Committee shall establish bylaws, rules and/or regulations for the conduct of its business. Administrative assistance and staffing for the PUC Small Firm Advisory Committee shall be provided at the discretion of the PUC.
(4) Except for the PUC Small Firm Advisory Committee’s authority as provided in Section 14B.5(B)(2), the Director shall have the authority over the implementation of this Chapter 14B for PUC Regional Projects to the same extent as all other Bids, proposals, and Contracts subject to the Chapter.
(C) PUC-LBE Status. Except as provided in Subsection 14B.5(D), PUC-LBEs shall have the status of LBEs for all purposes of this Chapter 14B for construction, specialty construction, construction material suppliers, construction equipment rental firms, trucking, and professional services including architectural and engineering for PUC Regional Projects. PUC-LBEs shall not have the status of LBEs for PUC Regional Contracts for general services or for any other Bid, proposal, or Contract subject to this Chapter.
(D) Bid Discount Exception. For PUC Regional Projects that will be performed exclusively 70 miles or more beyond the jurisdictional boundaries of San Francisco and for which no cost will be shared by members of BAWSCA, Contract Awarding Authorities shall only apply Discounts to Bids from PUC-LBEs for the purpose of determining the apparent highest ranked proposal or the apparent lowest Bid where application of the Discount will not adversely impact the ranking for negotiation or award process of a Bid submitted by any Micro-LBE, Small-LBE, or SBA-LBE certified under Section 14B.3. For Water System Improvement Program projects, and projects outside of the jurisdictional boundaries of San Francisco where all or some cost is shared by members of BAWSCA, PUC-LBEs shall have the same status as LBEs.
(Added by Ord. 92-06, File No. 050784, App. 5/11/2006; amended by Ord. 30-13
, File No. 121105, App. 3/5/2013, Eff. 4/4/2013; Ord. 250-14
, File No. 140999, App. 12/17/2014, Eff. 1/16/2015, Oper. 7/1/2015; Ord. 79-16
, File No. 160207, App. 5/20/2016, Eff. 6/19/2016; Ord. 203-21, File No. 210835, App. 11/12/2021, Eff. 12/13/2021, Oper. 7/1/2022)
(A) Notwithstanding any other provisions of this Chapter 14B, in order to increase the ability of small, local non-profit enterprises to compete for City Contracts on an equal basis with small, local for-profit enterprises, the Director shall certify as Non-profit LBEs, enterprises that meet all of the following criteria:
(1) The non-profit is financially and operationally independent from, and operates at arm's length to, any other non-profit or for-profit enterprise.
(2) The non-profit is continuously in operation.
(3) The non-profit is a California Nonprofit Organization that is both
(a) regulated as either a Nonprofit Public Benefit Corporation under California Corporations Code Sections 5110-6815 or a Nonprofit Religious Corporation under California Corporations Code Sections 9110-9690, and
(b) tax-exempt under section 501(c)(3) of the Internal Revenue Code.
(4) The non-profit performs a Commercially Useful Function. In the case of non-profits, the Commercially Useful Function may be related or unrelated to its stated charitable mission. The tax, or other implications, including forfeiture of tax-exempt status, that a certified non-profit may incur for engaging in substantial business operations unrelated to its charitable mission are solely the responsibility of the non-profit and not a criterion for certification hereunder.
(5) The non-profit maintains its principal place of business in a fixed office within the geographic boundaries of the City.
An office is a fixed and established place of business, including a qualified home office, where business is conducted on a regular basis of the type for which certification is sought. A residence qualifies as an office only if none of the persons who own or control the business also maintains an office related to a for-profit or non-profit enterprise outside the residence in the same or related field, and the persons who own or control the business claimed a business deduction on the prior year's income tax return, or for businesses started after the last tax return, would qualify for a deduction on the next tax return. None of the following constitutes an office: a post office box, a temporary location, a movable property, a location that was established to oversee a project such as a construction project office, or work space provided in exchange for services, as opposed to monetary rent.
To establish a principal place of business in San Francisco, a non-profit must demonstrate that the majority of its paid and volunteer staff are based in the San Francisco office.
Suppliers must maintain a warehouse in the City that is continuously stocked with inventory consistent with their certification. Truckers must park their registered vehicles and trailers within the City.
(6) The non-profit has applicable current filings with State and Federal agencies, including the California Attorney General (Form RRF-1), the California Franchise Tax Board (Forms 199 and 109), the California Secretary of State (Form S1-100) and the Internal Revenue Service (Form 990).
(7) The non-profit has been located and doing the same type of business activity as the type(s) for which certification is sought in San Francisco for at least six months preceding the application for certification.
(8) The non-profit has staff under continuous contractual commitment with licenses or other relevant trade or professional certifications, or, where licensing is not required, relevant training and experience that are appropriate for the type of business for which the non-profit seeks certification.
(9) The Board of Directors or other governing body of the non-profit consists exclusively of individuals who reside in the United States or its territories.
(10) The non-profit has average gross annual receipts in the prior three fiscal years that satisfy the criteria set forth in Section 14B.3(B).
(11) (a) Full time City employees, if any, who serve on the Board of Directors or other governing body of the non-profit shall not constitute a majority of the membership of such body or be capable of exercising a controlling number of votes for such body; and
(b) any non-profit that includes any full time City employees on its Board of Directors or other governing body shall be ineligible for award, as a prime Contractor or Subcontractor, of any Contract to be awarded by, and/or overseen by, the City Department or entity that employs such Board or other governing body member.
(B) Only firms with average gross annual receipts in the prior five fiscal years that meet the requirements of Section 14B.3(B) for Small-LBEs or Micro-LBEs, respectively, may be certified as Non-profit Small-LBEs or Non-profit Micro-LBEs. The Director shall determine gross receipts according to recognized accounting methodologies that the Director determines most accurately reflect the actual money that the non-profit received or was entitled to receive during the relevant period.
(C) Certification as OBE. All Non-profit LBEs shall be certified as OBEs. Non-profits shall not be eligible for certification as MBEs or WBEs. Non-profit LBEs shall have the status of LBEs for all purposes of this Chapter 14B, including but not limited to Bid Discounts and subcontracting participation credit.
(D) Additional Requirements. Certification of Non-profit LBEs shall be subject to such requirements, if any, that the City Administrator shall by rule adopt, to the end that eligibility requirements for certification for Non-profit LBEs shall conform to eligibility requirements for certification for for-profit LBEs to the extent practicable taking into consideration the differences in their ownership and operational structures.
(A) Good Faith Efforts by Awarding Authorities to Obtain LBE Bids on Prime Contracts. Contract Awarding Authorities shall use good-faith efforts for all Contracts subject to the Discount provisions of this Chapter 14B to solicit and obtain Bids from the broadest possible diversity of LBEs and to ensure that MBEs, WBEs, and OBEs are not arbitrarily excluded from participation. Good faith efforts shall include the following:
(1) Arranging Contracts by size and type of work to maximize the opportunities for LBEs to participate. This includes dividing projects into smaller parts.
(a) As soon as practical before soliciting Bids, Contract Awarding Authorities shall submit Large Contract Proposals to the Director for review. The Director shall determine whether the proposed Contract can be divided into smaller Contracts so as to enhance the opportunity for participation by LBEs. For purposes of this paragraph, "Large Contract Proposals" means any Public Works/Construction Contract estimated to cost more than $5,000,000, any Professional Services Contract estimated to cost more than $1,000,000, and any Commodities Contract with a term greater than one year, including any options to renew or extend.
(b) If the Director determines, after consulting with the Contract Awarding Authority, that the Contract can be divided into smaller Contracts, then the Director and the Contract Awarding Authority shall confer regarding all of the costs and benefits of soliciting the Contract as a single Contract or dividing it into smaller Contracts, including but not limited to the potential for enhanced opportunities for LBE participation as Prime Contractors, the potential for LBE participation as Subcontractors, suitability of procuring the work through Micro-LBE Set-Aside under Section 14B.7(K), relative costs, administrative issues, and any other matters relevant to the accomplishment of the purpose of the subject Contract or Contracts. If, after exchanging information and conferring regarding these issues, the Contract Awarding Authority and the Director are unable to agree on whether to divide the Contract into smaller Contracts or how to divide the Contract, the Mayor or the Mayor’s designee, provided that the designee is not the department head of the Contract Awarding Authority, shall resolve the matter.
(2) Outreaching to all LBEs with appropriate certifications for the work or services to be performed to solicit their interest in specific contracting opportunities when not impracticable to do so, and encouraging LBEs to attend prebid meetings.
(3) Posting contracting opportunities on the Department, Office of Contract Administration, and/or other centralized City website, as applicable, with adequate lead time for LBEs to effectively respond to the opportunity.
(4) Providing all Bidders, including LBEss,1
access to adequate information about the plans, specifications, and requirements of the proposed Contract.
(5) Using the services of community and contractors' groups to assist in the recruitment of LBEs.
(6) For Professional Services, General Services, Architect/Engineering and Commodities Contracts, the estimated cost of which exceeds $10,000 but is less than the Minimum Competitive Amount, or for Public Works/Construction Contracts, the estimated cost of which exceeds $10,000 but is less than the Threshold Amount, Contract Awarding Authorities are not required to undertake the good faith efforts steps set forth in Section 14B.7(A)(3) when it is impracticable to do so.
(B) Best Efforts on Contracts Not Otherwise Subject to this Chapter. Contract Awarding Authorities shall adopt the same good faith efforts set forth in Section 14B.7(A) for the award of leases, franchises, concessions, and other Contracts not subject to the Discount provisions of this Chapter 14B, unless impracticable to do so. At a minimum, Contract Awarding Authorities shall notify LBEs that are certified to perform the work contemplated in a Contract and solicit their interest in the Contract. For Contracts with mixed local and federal and/or State funding subject to Section 14B.18(A) where the federal or State laws, rules, or regulations prevent the implementation of LBE preference programs, Contract Awarding Authorities are encouraged to the extent feasible to break up or create distinct portions of work, as applicable, to isolate any local funds so as to maximize the ability to implement this Chapter 14B’s programs.
(C) Equal Opportunity in Prime Contracting. Contract Awarding Authorities shall ensure that all aspects of their contracting process are transparent, fair, and do not arbitrarily disadvantage or discriminate against LBEs or any other business or Person on any basis prohibited by law. Contract Awarding Authorities shall document their selection processes as required by the Director to monitor and ensure compliance with this provision. The Director shall report any contracting process by a Contract Awarding Authority that the Director believes may be discriminatory in nature to the Human Rights Commission.
(D) Contracts Subject to Prime Bid Discounts. Contract Awarding Authorities shall apply Discounts to all Contracts the estimated cost of which exceeds $10,000 and is less than $10,000,000, except that the Bid Discount provisions applicable to SBA-LBEs shall apply only to Contracts (other than Commodities Contracts) with an estimated cost of no less than $400,000 and no greater than $20,000,000, and to Commodities Contracts with an estimated cost of no less than $400,000 and no greater than $10,000,000. Discounts shall apply to Bids from LBE Prime or Joint Ventures only where the LBE Prime or Joint Venture Partner will perform a Commercially Useful Function on the Contract. A LBE Prime or Joint Venture whose Bid receives a Discount and who thereafter fails to perform a Commercially Useful Function under the Contract at least equivalent in scope and value to the role represented in its Bid documents may be subject to sanctions as set forth in Section 14B.17(D) for noncompliance with this Chapter 14B.
(E) Amount of Discount. Unless otherwise provided in this Chapter 14B, Contract Awarding Authorities shall apply the following Discounts to each evaluation stage of the selection process, including qualifications, proposals, and interviews:
(1) For Contracts estimated by the Contract Awarding Authority to cost in excess of $10,000 but less than $10,000,000, a 10% Discount to any Bid from a Small or Micro-LBE. If after the application of the Discounts provided for in this Subsection 14B.7(E)(1) or Subsection 14B.7(F) to any Bid from a Small or Micro-LBE, the apparent low Bidder or highest ranking Proposer is not a Small or Micro-LBE, Contract Awarding Authorities shall apply a 5% Discount to any Bid from an SBA-LBE. Contract Awarding Authorities shall apply this 5% Discount to Contracts, except that the 5% Discount for SBA-LBEs shall not be applied at any stage if it would adversely affect a Small or Micro-LBE.
(2) For Contracts estimated by the Contract Awarding Authority to cost in excess of $10,000,000 but less than $20,000,000, a 2% Discount to any Bid from a Small, Micro, or SBA-LBE for Public Works/Construction, Architect/Engineering, Professional Services, or General Services Contracts. Bids from Small, Micro, or SBA-LBEs for Commodities Contracts in excess of $10,000,000 are not eligible for the Discount.
(F) Joint Ventures For Professional Services and Architect/Engineering. Unless otherwise provided in this Chapter 14B, for Contracts estimated by the Contract Awarding Authority to cost in excess of $10,000 but less than $10,000,000, Contract Awarding Authorities shall apply the following Discount to Bids from Joint Ventures with a Small and/or Micro-LBE Joint Venture partner participation on Professional Services and Architect/Engineering prime Contracts:
(1) 5% to a Joint Venture with Small and/or Micro-LBE Prime Contractor participation that equals or exceeds 35% but is under 40%;
(2) 7.5% to a Joint Venture with Small and/or Micro-LBE Prime Contractor participation that equals or exceeds 40%;
(3) 10% to a Joint Venture exclusively among Small and/or Micro-LBE Prime Contractors.
(4) Contract Awarding Authorities shall apply the Discount to each stage of the selection process, including qualifications, proposals, and interviews.
(5) The Contract Awarding Authority shall apply the Discount described in this subsection (F) only to Bids from Joint Ventures, as defined in this Chapter 14B and its duly promulgated Rules and Regulations, on Professional Services and Architect/Engineering Contracts, and only to those Joint Venture Bids where the Director finds that the Small and/or Micro LBE Joint Venture partner (a) will be responsible for, and has sufficient skill, experience, and financial capacity to perform a clearly defined portion of the work, and (b) shares in the Ownership, Control, management responsibilities, risks, and profits of the Joint Venture at least in proportion to the value of its assigned Joint Venture work. The Joint Venture’s Bid must set forth in detail the Small and/or Micro-LBE Joint Venture partner’s portion of the work separately from the work to be performed by the non-LBE Joint Venture partner, and such work must be assigned a commercially reasonable dollar value.
(G) Affidavit.
(1) Each Bidder and Contractor shall be required to sign an affidavit declaring under penalty of perjury its intention to comply fully with the provisions of this Chapter 14B and attesting to the truth and accuracy of all information provided regarding such compliance.
(2) Any Bidder that fails to comply with the provisions of this Chapter 14B in connection with the submission of a Bid may be subject to appropriate sanctions under Section 14B.17(D) whether or not such Bidder is awarded a Contract.
(3) No person shall knowingly make, file or cause to be filed with the City any materially false or misleading statement or report in connection with this Chapter 14B. If the Director has reason to believe that any person has done so, the Director may conduct an investigation, and after notice and a full and adequate opportunity to be heard, may impose appropriate sanctions under Section 14B.17(D), or the Director may refer the matter to an appropriate governmental law enforcement agency.
(H) Additional Requirements.
(1) Each Contract subject to this Chapter 14B shall incorporate by reference, and require the Contractor to comply with, the requirements imposed on Contractors therein. In addition, all Contractors shall incorporate by reference in all subcontracts entered into in fulfillment of a Contract’s subcontracting participation requirement, and require Subcontractors to comply with, all requirements applicable to Subcontractors under Chapter 14B. The Contractor’s compliance with Chapter 14B and Contractor’s Contractor’s1
duty to impose specified requirements in specified Subcontracts are material elements of the City’s agreement to enter into the Contract and failure to comply shall constitute a material breach of contract.
(2) If the Director finds that any Bidder, Subcontractor or Contractor fails to comply with any of the provisions of this Chapter 14B, rules and regulations implementing the Chapter, or Contract provisions pertaining to any LBE, LBE participation, or outreach, such Bidder, Subcontractor, or Contractor shall be liable for liquidated damages for each Contract in an amount up to 25% of the total amount of the Contract or subcontract, as applicable, or $1,000, whichever is greatest, as determined by the Director. The liquidated damages assessed shall be payable to the City upon demand and may be set off against any monies due to the Bidder, Subcontractor, or Contractor from any Contract with the City. Such willful failure to comply with any provisions of this Chapter 14B and the subsequent penalty shall be included in the Contractor’s evaluation report upon completion of the project, if such evaluation is collected.
(3) Contractors and Subcontractors shall maintain all records, including but not limited to such information specified by the Director, necessary for monitoring their compliance with the duties imposed on Contractors under this Chapter 14B, for five years following expiration of the Contract, or, as applicable, Subcontract, and shall permit the City to inspect and audit such records.
(4) During the term of the Contract, Prime Contractors shall fulfill the LBE participation commitments stated in their Bids and memorialized in their Contracts. A Contractor’s failure to achieve the level of LBE subcontractor participation specified in the Contract shall be deemed a material breach of contract.
(5) Prime Contractors shall include in all Subcontracts with a LBE a provision requiring the Prime Contractor to compensate the LBE Subcon- tractor for damages for breach of contract or liquidated damages equal to 5% of the Subcontract amount, whichever is greater, if the Prime Contractor fails to use the LBE Subcontractor as specified in the Bid and Contract unless the Director and the Contract Awarding Authority both give advance approval to the Prime Contractor to sub- stitute the LBE Subcontractor or otherwise modify the LBE commitments in the Bid and Contract documents. It shall be a material breach of contract for a Prime Contractor to fail to include such clause in all Subcontracts with LBEs. This provision shall also state that it is enforceable in a court of competent jurisdiction.
(6) Whenever amendments, modifications, supplements, or change orders increase the total dollar value of the Contract, the Prime Contractor must comply with those provisions of this Chapter 14B that applied to the original Contract with respect to the amendment, modification, supplement, or change order.
(7) Contract Awarding Authorities shall submit to the Director for approval all proposed Contract amendments, modifications, supplements, and change orders that cumulatively increase by more than 20% the total dollar value of all Contracts originally valued at $50,000 or more. The Director shall impose or increase the Subcontracting participation requirement as necessary to reflect additional opportunities for LBE participation from the proposed amendment, modification, supplement, or change order as appropriate.
(8) Prime Contractors and Subcontractors may not engage in any Back Contracting or other work shifting to a lower-tier Subcontract to evade using LBE Subcontractors to perform work or for any other purpose inconsistent with the provisions of this Chapter 14B, or rules and regulations adopted pursuant to this Chapter.
(9) Prompt Payment. For the duration of any Contract subject to LBE participation requirements, the Prime Contractor shall:
(a) Pay its Subcontractors within three working days after receiving payment from the City unless the Prime Contractor notifies the Director in writing within ten working days prior to receiving payment from the City that there is a bona fide dispute between the Prime Contractor and the Subcontractor, in which case the Prime Contractor may withhold the disputed amount but shall pay the undisputed amount. The Director may, upon making a determination that a bona fide dispute exists between the Prime Contractor and Subcontractor, waive this three-day payment requirement. In making the determination as to whether a bona fide dispute exists, the Director shall not consider the merits of the dispute. The Prime Contractor shall submit within 10 working days following receipt of payment from the City, a statement, in a form specified by the Director, attesting that the Prime Contractor has paid all Subcontractors all undisputed amounts from previous City payments; and
(b) Include its Subcontractor’s approved payment requests in any payment application to the City within 30 days of receiving an invoice from an LBE subcontractor.
(I) Reserved.
(J) Waivers. The Director shall waive the Discount provided in Section 14B.7(D), and post all approved waivers online on a CMD website, if:
(1) The Director finds, with the advice of the Contract Awarding Authority and the Office of Contract Administration, that needed goods or services are available from a sole source that is not currently disqualified from doing business with the City; or
(2) For Contracts in excess of $5,000,000, a Contract Awarding Authority establishes that sufficient qualified LBEs capable of providing the needed goods and services required by the Con- tract are not available, or the application of the LBE Discount will result in significant additional costs to the City if the waiver of the Bid Discount is not granted.
(K) Micro-LBE Set-Aside Program.
(1) Each fiscal year, each Contract Awarding Authority, in consultation with the Director, shall set aside the following for award to Micro-LBEs:
(a) Not less than 50% of eligible Public Work/Construction Contracts and
(b) Not less than 25% of Eligible Services/Commodities Contracts.
(2) Contracts under the Micro-LBE Set-Aside Program shall be competitively awarded in accordance with the Administrative Code, except that if (a) fewer than two qualified Micro-LBEs submit Bids, or (b) the Contract Awarding Authority determines that the Contract would not be awarded at a fair market price, then the Contract Awarding Authority may reject all Bids and rebid the Contract outside the set-aside program.
(3) Each Contract Awarding Authority shall include the following information concerning its compliance with the Micro-LBE Set-Aside Program to the Board of Supervisors as part of its annual report under Section 14B.15(B):
(a) Each Eligible Public Works/Construction Contract and, each Eligible Services/Commodities Contract awarded under the Micro-LBE Set-Aside Program, and its dollar amount; and
(b) Each Eligible Public Works/Construction Contract and each Eligible Services/Commodities Contract not awarded under the Micro-LBE Set-Aside Program, accompanied by an explanation as to why each such Contract either was not set aside, or, if set aside, was not awarded under the Micro-LBE Set-Aside Program.
(4) Contracts that are set-aside for award to Micro-LBEs shall not be subject to the subcontracting participation requirement under Section 14B.8. Micro-LBEs that subcontract any portion of a set-aside Contract should subcontract to businesses certified as Micro-LBEs, to the maximum extent possible. Micro-LBEs that subcontract any portion of a set-aside Contract must serve a Commercially Useful Function based on the Contract’s scope of work, and must perform work directly with a value of at least 25% of the total Contract amount.
(L) San Francisco First Program.
(1) Unless otherwise provided in this Chapter 14B, Contract Awarding Authorities shall use the good faith efforts set forth in Section 14B.7(A) to attempt to obtain at least three Bids from Micro or Small LBEs for all Public Works/Construction Contracts estimated to cost in excess of $10,000 but less than the Threshold Amount and all Commodities, Architect/Engineering, Professional Services, and General Services Contracts estimated to cost in excess of $10,000 but less than the Minimum Competitive Amount.
(2) If the Contract Awarding Authority is unable to obtain at least three Bids from Micro or Small LBEs, the Contract Awarding Authority shall prepare a written finding explaining why at least three Bids from LBEs were not obtained.
(M) Prompt payment. The City shall pay LBE Prime Contractors within 30 days of the date on which the City receives an invoice for work performed for and accepted by the City.
(N) Best Value Public Works Contract Discounts. For Contracts authorized under Administrative Code Section 6.74, Contract Awarding Authorities shall apply the applicable Discount to the price or cost portion of the Bid only. No Discount shall apply to the qualifications portion of the solicitation.
(Added by Ord. 92-06, File No. 050784, App. 5/11/2006; amended by Ord. 20-10, File No. 091405, App. 2/10/2010; Ord. 97-10, File No. 100333, App. 5/13/2010; Ord. 8-11, File No. 101006, App. 1/7/2011; Ord. 250-14
, File No. 140999, App. 12/17/2014, Eff. 1/16/2015, Oper. 7/1/2015; Ord. 94-16
, File No. 160225, App. 6/3/2016, Eff. 7/3/2016; Ord. 220-20
, File No. 200949, App. 11/6/2020, Eff. 12/7/2020; Ord. 203-21, File No. 210835, App. 11/12/2021, Eff. 12/13/2021, Oper. 7/1/2022)
CODIFICATION NOTE
1. So in Ord. 203-21.
(A) LBE Subcontracting Participation Requirements. Prior to soliciting Bids, Contract Awarding Authorities shall provide the Director with a proposed job scope for each (1) Public Works/Construction Contract that equals or exceeds 50% of the Threshold Amount, and (2) each Architect/Engineering, Professional Service, and General Services Contract that equals or exceeds 50% of the Minimum Competitive Amount. The Contract Awarding Authority may ask the Director to waive LBE subcontracting participation requirements where it anticipates that there are no subcontracting opportunities or there are not sufficient LBEs available to perform the subcontracting work available on the Contract.
The Director shall set LBE subcontracting participation requirements, including separate Micro-LBE, Small-LBE, and SBA-LBE subcontracting participation requirements when possible, for each such Contract, where appropriate, based on the following factors:
(1) The extent of subcontracting opportunities presented by the scope of the proposed Contract; and
(2) The availability and capacity of LBE Subcontractors certified to provide goods and services required under the scope of the proposed Contract.
Except where the Director determines there are not sufficient Small and Micro-LBEs available to perform the subcontracting opportunities presented by the scope of the proposed Contract, Bidders must list and use only Small and Micro-LBEs to satisfy the LBE subcontracting participation requirement set by the Director. Where the Director determines that there are not sufficient Small and Micro-LBEs available, the Director may authorize Contractors to satisfy the LBE subcontractor participation requirement by using Small, Micro or SBA-LBEs, or may set separate subcontractor participation requirements for Small Micro, and SBA-LBEs.1
For each Contract where the Director sets a LBE subcontracting requirement at less than 20%, the Director shall prepare a written explanation of the details justifying the LBE subcontracting requirement set. The written explanation shall be posted on line as soon as practicable.
(B) Satisfaction of Good Faith Efforts Requirements. At the time of a Bid, all Bidders must meet the LBE subcontracting participation requirement set by the Director, and also must conduct good faith efforts and file evidence of good faith efforts as required in Sections 14B.8(D) and (E) respectively, with the following exceptions:
(1) If LBE subcontracting participation in the submitted Bid exceeds the LBE subcontracting participation requirement set by the Director for the Contract by at least 35%, the Bidder is excused from conducting or documenting its good faith efforts as otherwise required in Sections 14B.8(D) and (E). LBE subcontracting participation shall be determined in this Section 14B.8(B)(1) only, as the sum of all participation by Small and Micro-LBE Prime Contractors, Small and Micro-LBE Joint Venture partners, and Small and Micro-LBE Subcontractors. Participation by SBA-LBE Subcontractors shall count toward LBE subcontracting participation for purposes of determining whether the Bidder is excused from conducting and documenting good faith efforts only if, under Subsection 14B(8)(A), the Director permitted Bidders to list SBA-LBE firms to satisfy subcontracting participation requirements on the Contract.
(2) Where the Director has set LBE subcontracting participation requirements for Public Works/Construction Contracts in an amount less than the Threshold Amount or on Architect/Engineering, Professional Services, or General Services Contracts in an amount less than the Minimum Competitive Amount, Bidders are not required to conduct good faith efforts or to file evidence of good faith efforts as required in Sections 14B.8(D) and (E).
(C) Non-responsive Bids. Bids that do not meet the LBE subcontracting participation requirements set under 14B.8(A) will be rejected as non-responsive unless the Director finds that the Bidder diligently undertook all the good faith efforts required by this Chapter 14B (or that the Bidder is exempt from good faith efforts requirements under Section 14B.8(B)) and that the failure to meet the good faith efforts requirements and/or the subcontracting participation requirements resulted from an excusable error. Bidders must contact a LBE before listing that LBE as a Subcontractor in the Bid. Unless an excusable error is found by the Director, a Bid that fails to document compliance with this requirement will be rejected as non-responsive. In addition, only LBEs that have been contacted and agreed to be listed as Subcontractors shall be credited toward meeting the LBE subcontracting participation requirements.
(D) Good Faith Outreach. In addition to meeting the LBE subcontracting participation requirements, Bidders on (1) Public Works/Construction Contracts that equal or exceed the Threshold Amount; and (2) Architect/Engineering, Professional Service, or General Services Contracts that equal or exceed the Minimum Competitive Amount shall undertake good faith outreach as set forth in this Section 14B.8(D) and duly promulgated Rules and Regulations to select Subcontractors to meet LBE subcontracting participation requirements. Except where a Contract does not include LBE subcontracting participation requirements or a Bid is exempt from good faith outreach under Section 14B.8(B), Bids from Bidders who fail to conduct and/or to document adequate good faith outreach steps as required by this Chapter 14B and its duly promulgated Rules and Regulations shall be declared non-responsive.
(E) Documentation of Good Faith Outreach. Each Bid that equals or exceeds the Threshold Amount or the Minimum Competitive Amount, as applicable, shall document good faith outreach and include the documentation with the Bid. Unless otherwise excused by this Chapter 14B, such documentation shall include: (1) the dollar amount of each subcontract and a statement of the scope of work to be performed under the subcontract; (2) the identification of each subcontract awarded to an LBE and, (3) for each subcontract, copies of the Subcontractor Bids submitted. Such documentation shall contain at least the Bid amount and a description of the scope of work, and separately, for each subcontract, a full and complete statement of the reason(s) for selection of the Subcontractor. If the reason is based on relative qualifications, the statement must address the particular qualifications at issue. If the reason is the Bid’s respective dollar amounts, the statement must state the amounts and describe the similarities and/or dissimilarities in the scope of work covered by the Bids. If no written Bids were submitted by some or all of the Subcontractors who bid the job, the Bidder shall submit a written statement containing (1) the amount of each oral Bid; and (2) separately, for each subcontract, a full and complete statement of the reason(s) for selection of the Subcontractor. Successful Bidders shall maintain the documentation described in this paragraph for three (3) years following completion of the Contract.
(Added by Ord. 92-06, File No. 050784, App. 5/11/2006; amended by Ord. 265-08, File No. 081231, App. 11/25/2008; Ord. 20-10, File No. 091405, App. 2/10/2010; Ord. 8-11, File No. 101006, App. 1/7/2011; Ord. 250-14
, File No. 140999, App. 12/17/2014, Eff. 1/16/2015, Oper. 7/1/2015; Ord. 203-21, File No. 210835, App. 11/12/2021, Eff. 12/13/2021, Oper. 7/1/2022)
CODIFICATION NOTE
(A) Prohibition on Discrimination. A Bidder may not discriminate in its selection of Subcontractors against any person on the basis of race, gender, or any other basis prohibited by law. The City Administrator shall work the Human Rights Commission to ensure that this provision is effected to the fullest extent allowed by law. Contract Awarding Authorities and the City Administrator shall refer all formal complaints of discrimination and all other instances where discrimination may have occurred of which they become aware to the Human Rights Commission for investigation and resolution pursuant to Administrative Code Chapter 12A and Section 14B.9(D).
(B) Availability Data. In order to prevent unlawful discrimination in the selection of subcontractors, and to identify and correct unlawful practices, the City will monitor the administration of City Contracts, including the selection of Subcontractors, as provided in this Section 14B.9. For Public Work/Construction, Architect/Engineering, Professional Services, and General Services Contracts which the Contract Awarding Authority reasonably anticipates will include Subcontractor participation, prior to the solicitation of Bids, the Director shall assemble data regarding the availability of MBEs, WBEs, and OBEs to provide work that is likely to be subcontracted. The Director, in the Director's sole discretion, shall determine the appropriate methodology.
(C) Requirements for Solicitations. In all solicitations of Public Work/Construction, Architect/Engineering, Professional Services, and General Services Contracts for which the Contract Awarding Authority reasonably anticipates will include Subcontractor participation, the Contract Awarding Authority shall include the availability data described above. Bidders shall undertake all required good faith efforts outreach steps in such a manner as to ensure that neither MBEs nor WBEs nor OBEs are unfairly or arbitrarily excluded from the required outreach.
(D) Review and Investigation by the Human Rights Commission. The Director of the Human Rights Commission may review or investigate any Bid, including the selection of the Bidder's Subcontractors, to determine whether discrimination may have occurred. The Director of the Human Rights Commission shall review Bids, during the bid protest period, to determine whether: (1) a potential Subcontractor or other person has filed a complaint of discrimination; (2) there is a significant difference between the percentages of MBEs, WBEs, or OBEs available to provide goods and services as Subcontractors on the Contract and the percentages of the Bidder's Subcontractors who are MBEs, WBEs, or OBEs; or (3) other facts and circumstances suggest that further inquiry is warranted. The Director of the Human Rights Commission, in the Director of the Human Rights Commission's sole discretion, shall determine whether and when to investigate further the conduct of a Bidder or Contractor.
(Added by Ord. 92-06, File No. 050784, App. 5/11/2006; amended by Ord. 250-14
, File No. 140999, App. 12/17/2014, Eff. 1/16/2015, Oper. 7/1/2015)
(A) City Administrator. In addition to the duties and powers given to the City Administrator elsewhere, the City Administrator or designee shall:
(1) When necessary, subpoena persons and records, books and documents for any hearing or investigation by the City Administrator or Director or audit pursuant to Section 14B.10(B)(5) concerning certification under, or compliance with this Chapter.
(2) Adopt rules and regulations establishing standards and procedures for effectively carrying out this Chapter.
(3) Issue forms for the Controller or Contract Awarding Authorities to collect information from Contractors as the City Administrator deems necessary to perform its duties under this Chapter.
(4) Hear appeals challenging certification denial decisions by the Director or the imposition of any sanction specified in Section 14B.17(D) against a Bidder, Contractor, Subcontractor, certified LBE, or applicant for certification.
(5) Direct Contract Awarding Authorities, departments and the Controller to provide to the Director such information as will be necessary to enable the Director to issue reports required by this Chapter to the Mayor and the Board of Supervisors, and otherwise to perform his/her duties imposed hereunder.
(B) CMD Director. In addition to the duties and powers given to the CMD Director elsewhere, the Director shall:
(1) Levy the same sanctions that a Contract Awarding Authority may levy as specified in Section 14B.17(D).
(2) Ensure that the necessary data concerning LBE, MBE, and OBE availability and participation in City Contracting is collected, analyzed, and included in CMD's annual report required by Section 14B.15(B). The Director shall identify areas of contracting where the City or any of its departments are failing to meet LBE subcontracting requirements or are contracting with MBEs, WBEs, or OBEs at rates less than would be anticipated by the availability data.
(3) Provide information and other assistance to LBEs to increase their ability to compete effectively for the award of City Contracts.
(5) In cooperation with the Controller, randomly audit at least three prime Contractors each fiscal year in order to insure their compliance with the provisions of this Chapter. The Director, in cooperation with the Controller, shall furthermore randomly audit 10 percent (10%) of the Joint Ventures granted Bid Discounts in each fiscal year.
(6) Take actions to ensure compliance with the provisions of this Chapter, including, without limitation, intervening in the selection process in the event of actual discrimination or harm, or issuing recommendations for selection processes administered directly by Contract Awarding Authorities to ensure that the minimum qualifications, evaluation criteria, or scoring methodologies set forth in the requests for bids, qualifications, or proposals, or the selection panel deliberations do not inadvertently disadvantage qualified Small-LBEs, Micro-LBEs, and MBEs, WBEs and OBEs, in competing for opportunities in City contracting.
(Added by Ord. 92-06, File No. 050784, App. 5/11/2006; amended by Ord. 250-14
, File No. 140999, App. 12/17/2014, Eff. 1/16/2015, Oper. 7/1/2015)
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